Integrative Bargaining

¶ … Integrative and Distributive Bargaining. Integrative bargaining. When the parties in negotiation are not in direct conflict and both can potentially benefit from good faith bargaining, an interest-based, or integrative form of bargaining can often lead to good outcomes. The basis for integrative bargaining is that each party willingly seeks to understand the presenting issues from the perspective of the other party. In this way, emerging interests are identified and acknowledged, and the negotiation takes on a decidedly win-win flavor.

The goal of integrative bargaining is that both parties will achieve benefits in the form of their interests being met, and both parties will attain a better understanding of the challenges and objectives of their negotiating partners, The key to making integrative bargaining work is to ensure that at least one party understands how to "enlist the other in a mutual discovery of interests" (Honeyman, 2010). Until and unless this happens, the negotiations generally deteriorate into a zero sum condition. Alternately, the parties may begin a distributive bargaining relationship.

In order for integrative bargaining to work, the parties must be willing to share information so that each party's interests can be discovered and understood. It is important for the parties to work from a position of mutual trust. Without the even ground that develops when both parties conduct the negotiation in good faith, the tendency will be for one party or the other to believe that distributive bargaining will produce better outcomes for them. Distributive bargaining.

When one party in a negotiation is in a position to derive benefit and the other party must give ground, a distributive bargaining situation exists. In distributive bargaining, the interests of the other party are not considered, and the relationship is not important to either party. Distributive bargaining may be part of a complex negotiation that can also employ integrative bargaining for some terms and conditions. In distributive bargaining, which is positional, both parties begin the negotiation from positions that area very far apart.

Over time, and with concessions, the difference between them narrows "without either party really understanding what the other seeks to achieve" (Honeyman, 2010). Thompson's Pyramid Model. A framework used in conjunction with integrative bargaining, the pyramid model by LeighThompson of Northwestern University, seeks to create outcomes superior to those that might be achieved through distributive bargaining. Both the process and the product are important in integrative bargaining and in the application of the pyramid model. Three levels of agreement form the structure of the pyramid model.

In Level 1 agreements (BATNA), both parties achieve outcomes that are preferred to their reservation point, which is within the zone of possible agreement, or ZOPA. A ZOPA represents the sweet spot where interests and options for both parties overlap. It may not be a large zone, but identifying its boundaries is critical to reaching Level 2 agreements. Coined by Roger Fisher and William Ury in Getting to Yes: Negotiating Without Giving In -- their 1981 bestselling book -- BATNA stands for the best alternative to negotiated agreement.

In Level 2 agreements (Superior Agreement), the outcomes are preferred to those in Level 1 and new issues may emerge in which both parties recognize similar objectives. Level 3 agreements (Pareto Optimal) are optimized, such that, any change to this level of agreement would produce benefit for one party over the other, and would harm the other party. The goal of integrative bargaining when using Thompson's Pyramid Model is to achieve Level 3 agreement, and to "leave nothing on the table" (Thompson, 1998).

"To achieve integration, negotiators can deal with multiple issues at the same time and make trades between them" (Spangler, 2003). By integrating their interests and identifying the ZOPA, the parties create joint value. Neither party achieves the exact outcome they desired when they began negotiations, but each.